All of us spend money on almost everything. We buy our own food, pay our utility bills, and spend money on some vacations, entertainment and so on.
Spending and overspending money are two different things. It’s OK to spend money especially on our basic needs. However, overspending is not good and most of the time, it leads to debt, unwanted debt specifically.
Do you have any idea which items do you spend the most? Do you have a tracking list of your expenses?
In the past years, my wife and I normally record our expenses using Google Docs spreadsheet. By using this, we can update and edit our list of expenses so that we can have idea where our money goes.
However, almost one year now, we stopped tracking our expenses because we don’t normally buy over-expensive items. We already stopped budgeting since we only buy our basic needs most of the time and we are not impulse buyers.
If you want to know some tips on how to avoid overspending, take a look on the things that you can do below.
1. Start a Budget
My wife and I stopped using a budget because we agreed on a mutual consent that we will not buy expensive items on an impulse. Normally, we only buy our basic needs and day-to-day items.
If we are going to buy high-priced items, both of us should decide and agree before purchasing that product. A budget is very useful when you don’t know how and where you should spend your money.
Budgeting at the first time can be hard and may cause uneasiness between you and your spouse. However, it will greatly help in allocating your money on the most important things.
It will also help when you’re planning to save money. The first step in budgeting is to track your expenses so you have an idea which items you spend the most.
Like what I said earlier, my wife and I use Google Docs spreadsheet so both of us can update and edit our budget list whenever necessary. Since it is an Internet-based application, we can do it anytime and anywhere through the help of the Internet.
Before you can use Google Docs, you should apply for a GMail account. It is very easy to use and works like MS Word application.
2. Avoid Impulse Buying
Impulse buying is the companion of overspending. From the word itself, impulse buying is buying items based on your desire without thinking if it is necessary or not. You buy the product without carefully thinking if you really need the item.
In order to avoid impulse buying, you should make a 30-day waiting period. After 30 days, decide and think whether you still want that item. In most cases, most of the gadgets and electronic products that we want cannot be gone after one month, thus, you can still buy it after one month had elapsed.
In addition, as much as possible, don’t go frequently at supermarkets and shopping malls to do window shopping. It is better to go to park or spend more time in your home to avoid the temptation of buying out of impulse.
3. Trim Down Your Credit Card Usage
Based on several studies about credit card usage, most people spend more when they use credit card than using cash. Moreover, base on personal experience, I would say this study is true.
I have noticed that using credit card in supermarkets made us to spend more money on what is on the grocery list. Many people don’t realize that every time they use their credit cards, they need to pay it in the future.
Experts and financial planners say that using or paying things in the form of cash is more difficult to do than paying through credit card because you can see your money going away from your pocket. Unlike credit card payment, there’s no physical cash involved during the transaction when you use your credit card.
4. Use Cash More Frequently
There’s some “hurt” when paying cash unlike paying through credit card. In order to avoid overspending little by little, you should try to use cash more frequently when buying items.
Using cash makes you aware that spending money on things you don’t really need is a waste of your resources. In this way, you’ll be wiser on choosing the items you will buy.
Other people use the envelop system when budgeting or allocating money to the items they will purchase in the future. I would suggest you can also try to follow this method and see for yourself if this will work or not.
When you use the envelop system, you will place a certain amount of money on several envelops depending on the amount of money you needed for each one. For example, you will put in one envelop the money you need to pay your electricity bill, to another envelop for water bill and so on.
5. Avoid Shopping Online
Today, it is a lot easier and faster to buy stuffs online because we are already in the age of Internet and computer technology. More and more people nowadays buy products online through various ways like group buying sites, classified ads, and even Facebook!
With the help of credit or debit card, you can purchase almost anything online. Thus, when you do shopping online, you are more prone to overspend money because of the ease and convenience of selecting the item you want.
If you have no discipline on buying stuffs, you must avoid shopping online because it will surely make you overspend your money. However, online shopping will also save you some money because you don’t need to go directly to the store to buy the item you want. Thus, if use properly and wisely, online shopping will bring many benefits to the consumer.
If you are planning to save more money, you have to make a plan and as much as possible, spend your money wisely. You need to start today because the best time to begin saving money is today.
Overspending will surely not help you to save more money. In order to avoid overspending, discipline is very necessary and with the tips outlined in this post will help you use your money properly.
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